This story was updated on October 21, 2011.
More than 40 years ago, U.S. Senator Robert Kennedy, ruminating on the value of measuring a nation’s gross domestic product, concluded that the index measures everything “except that which makes life worthwhile.” A growing number of researchers and politicians are starting to agree with him.
Leading the way in Canada is a group of researchers that unveiled Oct. 20 the new Canadian Index of Wellbeing, or CIW. It is a national index that aims to measure and track the quality of life of Canadians. “We certainly recognize that [the GDP] is a valuable indicator,” said Bryan Smale, CIW director and professor of recreation and leisure studies at the University of Waterloo. “But the story is bigger than that,” he said.
More than a decade in the making, the CIW is comprised of eight sub-indices: community vitality, democratic engagement, education, environment, healthy populations, leisure and culture, living standards and time use. Each sub-index is calculated using various statistical indicators, 64 in all, that measure everything from housing affordability to smoking rates to voter turnout. The data are derived mainly from Statistics Canada and other government agencies. The overall index will convert the indicators into a single number that, like GDP or the S&P/TSX Composite Index, will move up and down over time, indicating whether the Canadian quality of life is improving or deteriorating.
“One of the things we are trying to do is change the discourse, because right now there is such a focus exclusively on the economy, and it could be at the cost of all the other things that matter to Canadians,” Dr. Smale said.
Researchers hope that over time the CIW will come to influence public policy and decision-making. “What we count matters,” said Roy Romanow, chair of the CIW Advisory Board and former Saskatchewan premier, in a speech earlier this year. “What we count helps shape the dialogue in this country . . . [and] influences the policy agendas and decisions of governments.”
Since its introduction in the 1930s, gross domestic product has become the standard-bearer of statistical indicators. It measures a nation’s total output of goods and services and is used to determine how quickly the economy is expanding or contracting. But critics regret that the indicator has become synonymous with societal progress. In their view, GDP is flawed on several fronts. For one, it excludes important factors like the state of the environment, income disparities and the health of citizens. GDP also incorporates things that aren’t necessarily beneficial: for example, a spike in cigarette sales or an environmental disaster like the BP oil spill in the Gulf of Mexico would cause GDP to rise.
The CIW, on the other hand, distinguishes between activities that benefit wellbeing and those that don’t. Although the CIW has increased steadily since 1994, the baseline year, its growth remains well below the GDP’s, indicating that Canadians’ quality of life hasn’t kept pace with the country’s economic growth. The CIW rose 11 percent from 1994 to 2008 compared to GDP growth of 31 percent in the same period.
Dr. Smale, who was lead researcher for the leisure and culture domain, said one of the things tempering the CIW’s rise is the amount of time Canadians spend on social and leisure activities, which has declined over the years. Indicators measuring the state of the environment and Canadians’ time use also declined and the health index rose only modestly.
There are also notable gender, age and regional differences, Dr. Smale noted. But, he added, he and other CIW researchers hope the index won’t be used to create regional rankings within Canada. “That’s not the point,” he said.
The CIW Network, housed at the University of Waterloo, includes about 30 researchers from universities across Canada, who hope to update the index annually. The project started in 1999 with funding from the Toronto-based Atkinson Charitable Foundation.
The project is part of a global movement to come up with an alternative way to measure societal progress that goes beyond wealth or economic consumption. Similar efforts are underway in France, England, Australia and other countries. Dr. Smale said that the OECD has identified the CIW as a global leader in this effort and Australian researchers are following the project closely with plans to develop a similar index.